OVL in talks for acquiring stake in Sudan oil field

NEW DELHI, Dec 11, 2003 (PTI) — ONGC Videsh Ltd, the overseas arm of state-run Oil and Natural Gas Corp, is in talks with two Middle-East Asian companies to acquire stake in an oil field in Sudan that is estimated to hold oil reserves in excess of 3.5 billion barrels.

OVL is talking to Gulf Petroleum Corp and Al-Thani Group for acquiring 11 per cent stake in exploration Block 3 and 7, in eastern Malut basin of Sudan, industry sources said.

Production from Block 3 and 7 is expected to begin in 2005 and reach 10 million tonne per year.

Block 3 and 7 have Petronas of Malaysia and China National Petroleum Corp (CNPC) of China as majority stake holders. Sudapet (Sudan National Petroleum Corp) also has a five per cent stake.

OVL has offered a little less than $40 million to buy 11 per cent stake from the two firms.

“Talks have almost concluded and OVL may sign the deal next month,” a source said adding Petroleum Ministry will move a Cabinet note for seeking approval for the investment and the development expenditure shortly.

Though the bid price is well within OVL’s special empowerment for investments overseas, a proposal is being sent to the Cabinet Committee on Economic Affairs (CCEA) to get clearance for further expenditure in developing the field.

The CNPC-led consortium will bring to production Blocks 3 and 7 in 2005 with an initial 170,000 barrels per day (8.5 million tonne) on stream.